HOW TO WRITE A COMPREHENSIVE FEASIBILITY STUDY

A feasibility study looks at the viability of an idea with an emphasis on identifying potential problems and attempts to answer one main question: Will the idea work and should you proceed with it?

Before you begin writing your business plan you need to identify how, where, and to whom you intend to sell a service or product. You also need to assess your competition and figure out how much money you need to start your business and keep it running until it is established.

Feasibility studies address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plan.
Why Are Feasibility Studies so Important?

The information you gather and present in your feasibility study will help you:

List in detail all the things you need to make the business work;
Identify logistical and other business-related problems and solutions;
Develop marketing strategies to convince a bank or investor that your business is worth considering as an investment; and
Serve as a solid foundation for developing your business plan.



The main reason for this article is to enable you to ascertain or evaluate that workability of your idea(s) in order to bring it to lime light. Feasibility study is the first step you must take in order for your idea(s) to see the light of the day.



In addition, before you can borrow money from a bank for example, they must definitely ask for your feasibility study report.



In the other hand, a feasibility study is an assessment of a project of business idea (opportunity) to determine whether or not it is worthy of support. It helps the decision maker or investor to sharpen his judgment and not to replace it. It is often a precursor to business plan.



THE NEED FOR A FEASIBILITY STUDY

That ideas/projects were feasible yesterday at a given location does not mean that they would be so today for the same or different location given the erratic changes that occur now and then in the character of the national economy, mind you not two ideas/opportunity are identical. Every idea is unique.



Another reason why it may be necessary to carry out the study/evaluation, even if we know it is potentially viable is to find out how profitable the business opportunity/idea is at present. For instance, if one intend to source for funds from banks or any financial institution, the rate of interest in the bank varies from time to time. The rate of return on a given investment, which was accepted as reasonable when interest rate was 8%, may no longer be if the interest rate in the bank jumps to 14%.



Furthermore, a business opportunity, which was considered not risky at the interest rate of 8%, may become highly risky if the interest rate is 14%.



It is therefore; clear that mere alteration in the bank rate can make our erstwhile profitable opportunity less profitable. It is therefore still necessary to carry out some form of evaluation whenever one wants to embank on a business opportunity/idea.



CONTENT OF A FEASIBILITY STUDY

These are main parts of the feasibility study.

(1) THE BUSINESS IDEA:- A business idea is a short and precise of the basis operations of the business.

(2) EXECUTIVE SUMMARY:- It contains the important information from the rest of the feasibility study. It is important that the summary is clearly worked out and looks tidy because, it is the first impression any one who reads it will get of your business.

(3) The Marketing Plan:- Marketing is everything you do to find out who your customers are and what they need and want.

(4) Form Of Business:- There are different forms of business. They include sole proprietorship, partnership, limited company and cooperative.

(5) Staff:- The personnel you require for your business, in terms of skill experience and number.

(6) Legal Responsibilities And Insurance:- Every business has legal responsibility. Therefore as an entrepreneur you need to be aware of these responsibilities. Some lines of business also require insurance coverage to give you financial security against different kinds of risks.

(7) Costing:- As an entrepreneur, you need to be able to set your prices, make business plans and to calculate the cost of your products and services.

( Financial Planning:- All businesses need to plan for profit and cash flow.

(9) Required Start Up Capital:- The amount of money required to start the business i.e. money for equipment materials, wages etc.

(10) Sources Of Start Up Capital:- Having determined the amount of money required to start, it then becomes necessary to ascertain where to get the money.
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WHERE TO FIND INFORMATION FOR YOUR FEASIBILITY STUDY.
In preparing your feasibility study, you will require information from the following sources.
(1) Government organizations.
(2) Non Government Organization
(3) Business Consultants
(4) Experienced businessmen
(5) Financial Institutions
(6) Private Business Associations.
(7) Libraries and Universities And Research Institution.
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MK

Sound Feasibility Study And Technical Analysis
In our numerous article where we discussed some of the business plans that can help you easily to set, we also have an article listing at least top 10 of the best businesses with their business plans to go with. We have as well established that the whole purpose of evaluating businesses as business projects is to be able to determine the profitability and desirability for the commitment of resources.